12+ 4 Sector Circular Flow Model. /* although this model is very simple, it does emphasise one very important point. The circular flow shows that some part of household income will be:
The final sector in the circular flow of income model is the overseas sector which transforms the model from a closed economy to an open economy. In economics, the terms circular flow of income or circular flow refer to a simple economic model which describes the reciprocal circulation of household sector: The circular flow means the unending flows of production of goods and services, income and expenditure in an economy.
Every economy is a dynamic system.
12+ 4 Sector Circular Flow Model. The economy is assumed to consist of only two sectors: The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. In this model, we assume that there are only two areas that need concern us: The important activities are by household sector are sale of its labour for.